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VOLUNTARY SEVERANCE SCHEME 2010

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					                        VOLUNTARY SEVERANCE SCHEME


                        SERVICE REDESIGN OPPORTUNITY


                                      2010/11




1. Introduction


      Following the submission and approval of professional service designs to the
      University as part of the Transition Process, it has been agreed that the
      University may offer employees within the relevant professional services a
      further opportunity to apply for voluntary severance (VS) on similar terms to
      those previously offered to employees during the Spring/Summer of 2010 and
      who fall within the scope of the scheme as identified in paragraph 2.

      This issue of this VS scheme is to enable the University to offer focussed VS
      opportunities in order to meet the specific business interests of the re-designed
      professional services. Heads of Professional Services will be primarily
      responsible for identifying those areas within their own service and should flag
      this in their submissions to the Faculty Design Group for their agreement where
      possible.


      The scheme will be available for employees within the relevant professional
      service immediately on commencement of the formal consultation process for
      that area and for one week following the publication of the outcome of formal
      consultation.


2. Scope of the Scheme


      VS may be offered to staff in a Professional Service which either (a) has more
      staff than posts in the new structure or (b) has a mismatch between the number
      of staff at different pay levels in the old and new structures. Applications for VS
      will only be considered where it is likely that
                       there is no post in the new structure for which the applicant
                        could reasonably be considered; or
                       where there are likely to be more staff at a particular level than
                        posts at that level; or
                          where voluntary severance is deemed to be in the business
                           interests of the re-designed professional service on other
                           grounds; and
                           Where opportunities for deployment or redeployment
                           elsewhere in the University are likely to be limited because of
                           the particular skill set, qualifications and experience of the
                           individual.


          The scheme is open to all employees within the relevant professional services
          who:


    i.       Have served a minimum of 2 years continuous service at the University by
             21 March 2011.


    ii.      Are employees of the University

             Where more than one contract of employment is held, employees and
             managers should refer to the ‘Frequently Asked Questions’ which have been
             developed alongside this scheme to clarify the situation and provide further
             information.


   iii.      Are not due to retire on or before 30 September 2011, have not resigned or
             terminated their employment for any reason, have not accepted alternative
             voluntary severance terms and signed a compromise agreement and have
             not received notice of the termination of their employment for any reason by
             the date that the scheme opens for applications from their service.


3. Timescales


    i.       The scheme will be open for a limited period only and the following
             timescales will be adhered to:
    ii.      Date of opening the formal consultation on the proposal for re-design
             of a particular professional service – voluntary severance scheme opens.
   iii.      One calendar week following the publication of the outcome of the
             formal consultation process - Expressions of interest deadline. Interested
             employees should have completed their part of the application process and
             have sent it to the relevant Head of Professional Service’s e-mail address
             or it should have arrived at the relevant Head of Professional Service postal
             address by 5.00pm on this day.

             (If any employee wishes to apply for the scheme and has asked for relevant
             information in good time but is still awaiting it, they should (preferably) e-mail

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           the relevant Head of Professional Service or telephone him/her to register
           their interest in the scheme and explain the reason for the delay. It may be
           possible, where exceptional circumstances exist, to extend the deadline but
           this could only be by a few days at the most).
    iv.    On receipt of application – Heads of Professional Services add their
           detailed views on whether or not they recommend approval of the application
           given the restructure proposals for their service and issues that are raised
           during the consultation period.
     v.    Applications and Head of Professional Service recommendations
           should be forwarded to the VSC to arrive no later than two working days
           after receipt of the application unless there are exceptional circumstances
           that the VSC agree are valid.
    vi.    The VSC will normally take decisions regarding applications for voluntary
           severance no later than three working days after receipt of the application
           and the recommendation from the Head of Professional Service. The VSC
           will make their decision on the basis of the criteria set out in paragraph 2
           above having due regard to the overall management interest and the
           comments and views expressed by the relevant Heads of Professional
           Services.
    vii.   From the day following a decision being made to accept or reject an
           application, the decision and the final leaving date will be conveyed to
           individuals and to the relevant Head of Professional Service.
   viii.   31st March, 2011 - this is the latest date for voluntary severance under this
           scheme to take effect except in cases where the VSC has agreed otherwise.
           It should be noted, however, that changes to USS pensions arrangements
           are due to be implemented with effect from 1st April 2011 which may affect
           those wishing to leave on voluntary severance terms after this date.
           Employees should seek advice on how these changes will affect them and
           will need to take this into account when considering an offer under this
           scheme.
    ix.    Appendix 1 identifies the process built around these time-scales relating to:
                a) How to make an application
                b) What Heads of Professional Services need to do as a result of
                   receiving an application
                c) How final decisions will be made



4. Criteria for Eligibility


   When an employee makes an application to be included in this voluntary severance
   scheme, s/he should pass it to the relevant Head of Professional Service for them
   to make a recommendation on whether or not acceptance of the application by the
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  University would be in the management interest. (The scope of the scheme as
  identified in paragraph 2 and the further guidance contained in Appendix 2 may be
  helpful in this regard).


5. Terms


     i.   The voluntary severance payment for successful applicants will be equivalent
          to one year’s basic salary and contractual pay items (if applicable) received
          by the individual subject to pro-rata reductions as listed below.
    ii.   For individuals not included in the provisions of paragraph 5 iv below,
          payments will be in the form of a lump sum based on the employee’s gross
          basic salary (i.e. excluding allowances and any other additional pay
          elements) at the time the offer is made. Any outstanding loans or payments
          due to the University may be deducted as appropriate.
   iii.   Part-time staff will have their calculation pro-rated (i.e. based on their actual
          salary rather than the full time equivalent).
   iv.    For employees aged between 50/55 (please refer to Appendix 3 for more
          detail) and 60 who are in certain pension schemes (including USS and
          LGPS) all or of part of the lump sum voluntary severance payment must be
          used to offset the additional cost of the Early Retirement Factor (ERF) which
          is applied to all retirements prior to the age of 60. Further information on
          this is contained in Appendix 3 to this document.
    v.    A redundancy payment will not be payable in addition to the severance
          amount as the reason for leaving will not be compulsory redundancy.
   vi.    Severance payments are normally tax free up to £30,000 but paragraph vii
          below may impact upon the level of tax free payment due.
   vii.   Where the period between the date of approval of any application for
          voluntary severance and the date of termination of the individual’s contract of
          employment is less than the full period of notice due to the individual, an
          amount of the severance payment equivalent to the gross pay due for the
          balance of the employee’s notice period will be subject to tax and national
          insurance.
               a) Depending on the overall amount of severance payment due, this
                  may or may not impact upon the total tax free element.
               b) The balance of the severance payment should be tax free up to
                  £30,000.
               c) Due to the complexity of this issue, some examples of what this
                  could mean for individuals have been developed and may be viewed
                  in the Frequently Asked Questions relating to this scheme.
               d)   Any part of the severance amount paid into a pension scheme,
                    whether by virtue of deduction of the ERF or by election of the
                    employee, is not subject to tax and national insurance. Where there
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                   is a cash balance due after ERF or any pension payment made by
                   election to the employee, this will be taxed as set out above.

   viii.   Employees accepted onto the scheme will be required to use their
           outstanding annual leave where possible prior to the agreed Termination
           Date. If, however, this is regarded by the Head of Professional Service as
           being operationally difficult then untaken accrued holiday will be paid (pro-
           rated as appropriate) and will be subject to tax and National Insurance.
    ix.    Employees will be asked to sign a compromise agreement before receiving
           their severance payment. Legal costs arising will be supported by the
           University up to £200 + VAT.


6. Pay, Benefits and Pensions Considerations
      i.   It is important that employees are in possession of as much information as
           possible regarding their individual pay, tax and pension information in order
           that they can consider it in conjunction with what is on offer via the voluntary
           severance scheme.
     ii.   It is the individual employee’s responsibility to obtain this information.
           Neither the Payroll and Pensions Office nor the Human Resources
           Department will initiate this. If an employee chooses not to ask directly for
           this information that is their decision but the University would strongly advise
           that employees do so.
    iii.   Employees who are potentially interested in applying for the voluntary
           severance scheme, in particular those employees who are over 50, should
           request pension estimates as early as possible in order to inform their
           deliberations and to ensure that enough time is available to consider this
           information. Broadly speaking, USS and PASNAS information will take up to
           ten days to obtain. Information from other schemes may take longer and, if
           demand for information is high, this could also be the case for USS and
           PASNAS. The earlier you ask, the longer you are likely to have to consider
           your options.

           Advisory note to employees:

           If you feel that you may be interested in applying for voluntary
           severance you do not need to wait until the scheme is formally opened
           to you before requesting a pension estimate. You are advised to make
           such a request as soon as you anticipate that an opportunity to apply
           may arise.

           You should also be aware that there are currently proposals in relation
           to changes to the USS pension scheme from 1st April, 2011. You are
           advised to ensure that you fully understand the impact of any changes

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        that are implemented should a leaving date be identified and agreed
        that is after 31st March, 2011.


 iv.    The University strongly advises employees to ensure that they are confident
        that they have fully explored the effects that accepting voluntary severance
        will have on their pay, pensions and general financial situation.
  v.    Given the importance of employees being aware of the effects that any
        changes to their employment status will have on their income (including
        issues relating to tax and National Insurance) and pensions, a ‘Frequently
        Asked Questions and Answers (FAQs)’ brief is available. This provides
        initial, general information to employees who may be interested in the
        voluntary severance scheme.
 vi.    Pay and pension enquiries should be made to the Pay and Pensions team
        via Pensions (pensions@soton.ac.uk; (telephone 22445); if emailing please
        use the following subject line ‘Personal Matter – Vol Sev’.
vii.    As previously stated, it is in employees’ interests to make these enquiries as
        early as possible. It will be necessary to have some idea of a preferred
        leaving date when you make your pay and pensions enquiries so that the
        information provided can be as accurate as possible.
viii.   It is important to note that any information relating to:
             a) Pension payments due can only be an estimate right up to the
                final day of leaving. External factors (such as the RPI) which are
                not within the influence of the University on the actual date of
                leaving may affect the final payments (including any lump sum
                payment) up or down. This is particularly important for USS
                members where the Early Retirement Factor Charge applies.
             a) Pay and pensions advice can only relate to the current situation.
                Any known changes can be flagged to employees but it is possible
                that not all the details and implications of these will be available
                before an employee needs to make a decision. In addition, it is
                possible that some changes may be introduced without pay or
                pensions having knowledge of these when providing individual
                information. Voluntary severance payments and values will be
                calculated according to the known rate of pay on the actual date of
                leaving.

                Please note that Payroll and Pensions are not able to offer
                financial advice on which options an employee should take and
                if in doubt you should seek independent financial or other
                professional advice.
 ix.    More detailed information relating to pensions issues has been included in
        Appendix 3.


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7. Help and Further Information
      Any queries that cannot be answered by Heads of Professional Services or by
      reference to the FAQs, Payroll or Pensions should be directed through HR, in
      the first instance via the following HR Client Partners:



8. Equality Impact Assessment:

   This scheme has been Equality Impact Assessed




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                                                                                 APPENDIX 1


                                    The Application Process


a. Any employee wishing to be considered for the scheme will need to obtain a copy of
   the application form available on the HR web pages when the scheme opens to the
   specific professional service and complete it (preferably electronically but it can be
   printed if necessary). This should then be sent to the relevant Head of Professional
   Service according to the time-scales advised for the specific service
b. The Head of Professional Service (HoPS) will add his or her recommendations to the
   form on whether or not s/he considers that accepting this employee onto the scheme
   would be in the management interest. The criteria/additional management guidance
   provided in Appendix 2 will inform this process.
c. The application together with the HoPS’s recommendation should be submitted to the
   VSC within two working days of the closing date.
d. Where the employee has more than one role/contract of employment with the
   University, the application form should be passed to all relevant Heads of Professional
   Service/Deans for their recommendations to be appended. In this situation, the
   application and both Heads of Professional Service/Deans recommendations should be
   received by the VSC within the same timescale.
e. Where the VSC has questions or queries in relation to either the application or the
   recommendations appended by Head(s) of Professional Services, these should be
   discussed and resolved as soon as possible after receipt of the completed form by the
   VSC
f. Once the decision to either accept or reject the application has been taken by the VSC,
   it will be conveyed to individuals, the Head of Professional Service and to the HR and
   Legal Department.
g. Formal letters will then be prepared by the Human Resources Department in
   association with the Legal Department confirming the decision to the individual. Where
   applications have been successful, additional information will be provided in relation to
   the process for the signing of compromise agreements.
h. A compromise agreement for the individual concerned will be prepared and sent out,
   either with the letter or separately in order that s/he may consider the content, obtain
   the necessary legal advice and sign the Agreement to confirm their acceptance of the
   offer and the terms on which it is made. The Compromise Agreement also needs to be
   signed by the employee’s solicitor.
i.   Signed copies of the letter and the compromise agreement must be returned to the
     Human Resources Department before final arrangements can be made for the
     employee’s departure from the University.
j.    31st March, 2011 - this is the latest date for voluntary severance normally to take
     effect except in cases where the VSC has agreed a later date.


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k. Staff members who leave under the terms of this scheme will not be eligible to be re-
   employed or re-engaged in either a remunerated or a non-remunerated position by the
   University for at least a 2 year period. This would include engagement as a Consultant,
   through the Temp Bank, or as a Visitor. Any employee leaving under voluntary
   severance arrangements would, however, be eligible to return in a student capacity if
   they meet entry requirements and are offered the opportunity to do so.


The decision making process described above will be final and there will be no right
of appeal at any stage of the process.




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                                                                                APPENDIX 2


                           VOLUNTARY SEVERANCE SCHEME


                               SERVICE REDESIGN 2010/11


                                         CRITERIA


These criteria have been developed:
          To offer guidance to Heads of Professional Services when considering whether
           or not an individual’s application is in the management interest
          To ensure that consistency of judgement is applied across all Professional
           Services.
          To supplement the information contained in paragraph 2 (scope) of the main
           scheme.


To apply for voluntary severance under the terms of this scheme, employees must first
meet one or more of the provisions set out in paragraph 2 in the main document.

The following criteria are designed to provide further guidance to managers when making
their recommendations to the VSC. They are not exhaustive and it may be appropriate to
take additional considerations into account if unusual circumstances relating either to the
business need or to individual applications exist.


The final decision will rest with the VSC which is not bound by the recommendation of the
Head of Professional Service.
a. Is the applicant part of a job share arrangement? If so, what is the impact on the
   remaining part of the role which is job shared?
b. Is the skill set, knowledge and/or experience of the individual unique or extremely
   specialised and important to retain for the future success of the university?
c. Is the applicant currently subject to formal action in relation to their conduct or
   capability, or awaiting the outcome of disciplinary or capability investigations or
   hearings which may result in them being liable to dismissal? If so, a decision on
   whether or not to accept them onto the voluntary severance scheme may be deferred
   pending the outcome. If matters remain unresolved by 10th March 2011 the voluntary
   severance application may be rejected.
d. Is a significant level of income for the university generated by the applicant/role? If so:



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           a. Does this arise as a result of the individual’s expertise or the award to them
              of specific funding, or could the individual be replaced with the same level of
              income continuing to be generated?
           b. Is the potential for income generation via this role/applicant likely to remain at
              the same or a similar level in the future?
e. Will savings be achieved by the university within a two year period if an application is
   accepted? If not, is there a ‘non-financial’ but equal qualitative benefit of accepting the
   application?
f. Does the Professional Service have an ongoing need for the work carried on by the
   individual, in the short term, which cannot be easily replaced but could be resolved by a
   deferment of the leaving date over a short period after 31st March, 2011?
g. Are there other considerations that arise, separately from the re-design of the
   professional service in question, which suggest that it would be in the management
   interest to agree to the application?



ADDITIONAL NOTES FOR HEADS OF PROFESSIONAL SERVICES


   The direct costs arising as a result of an applicant being accepted onto this voluntary
    severance scheme will be met centrally.
   Whilst it is the individual’s responsibility to obtain information from pensions and payroll
    and to ensure that they understand the financial impact on their own financial
    circumstances if they take voluntary severance, it is good management practice to help
    the individual to understand the need to do this.




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                                                                           APPENDIX 3


                Early retirement- staff in USS pension scheme
              General rules of principles which affect most staff *
Where the leaving date is 1st April 2011 or later, any new USS rules that have been
implemented will apply. This may / may not impact on individual pension
entitlements (no further details are available at this time). All details below relate to
the existing USS scheme

For staff aged below 50 as at 31st March 2011

Deferred pension benefits will apply and therefore applications can be made without
reference to pension estimates. Although a decision to accept VS would impact on
future benefits and payments.


For staff aged between 50 and 55

i) For staff who do not have continuous USS service since 5 April 2006
It is not possible to access pension benefits therefore applications can be made
without reference to pension costs. Although a decision to accept VS would impact
on future benefits and payments.

ii) For staff who have continuous USS service since 5 April 2006
The same rules will apply as for those staff aged between 55 and 60.

For staff between 55 and 60
  i.    For those staff between 55 and 60 years of age it may be possible (subject to
        the rules of the pension scheme) to take early retirement and use all or part
        of the voluntary severance payment that the individual would otherwise have
        received to offset the additional cost of the early retirement which is applied
        to all retirements prior to the age of 60.
 ii.    If the rules of the scheme require an early retirement factor cost (ERFC) to
        be paid in relation to an individual who is within scope, according to the rules
        of the scheme, of the early retirement provisions, then such an individual will
        only be accepted for the voluntary severance scheme if they take early
        retirement and the full cost of the ERFC is deducted from the voluntary
        severance amount.
 iii.   Any part of the severance amount used for this purpose is not subject to tax
        or NI deduction. Where the amount paid to the pension scheme is less than
        the voluntary severance sum then the remainder may be paid as a lump sum
        to the employee.
 iv.    Therefore it follows that any voluntary severance proposal which would cost
        the University more than 1 year’s gross salary for the individual will not be
        approved under this scheme, unless an individual is prepared to pay the

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            difference from their own funds. Such payment will need to be paid prior to
            the Termination Date. Costs of this Early Retirement Factor (ERF) are
            usually very high so for many of this category of staff this will not be viable.
   v.       The University will not permit employees who fall within these provisions to
            take a voluntary severance lump sum payment and defer their early
            retirement from the pension scheme.
   vi.      Where employees are considering this arrangement it is recommended that
            they take independent financial advice.
 For staff over 60
             As long as members have over 5 years pensionable service it may be
            possible to take early retirement with no associated employer’s costs.


                  Early retirement- staff in PASNAS pension scheme
General rules of principles which affect most staff PRIOR to proposed changes
  to Scheme rules up to and including 31st July, 2010 (letter from Director of
           Finance sent to all members dated 9 April 2010 refers) *


 For staff under age 55


            It is not possible to access pension benefits therefore applications can be
            made without reference to pension costs. Although a decision to accept VS
            would impact on future benefits and payments.



 For staff between 55 and 60


         a. For those staff between 55 and 60 years of age it may be possible (subject to
            the rules of the pension scheme) to take early retirement. Benefits will be
            reduced by an early retirement factor. Severance pay may be used in full or
            part to reduce the amount the benefits are being reduced.
         b. Where this amount paid to the pension scheme is less than the voluntary
            severance sum then the remainder may be paid as a lump sum to the
            employee.
         c. Where employees are considering this arrangement it is recommended that
            they take independent financial advice.


 For staff over 60
           It may be possible to take early retirement with no reduction applied to
            benefits.



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                  Early retirement- staff in PASNAS pension scheme
      General rules of principles which affect most staff if proposed changes to
     Scheme rules are applied from 1 August 2010 (letter from Director of Finance
                   sent to all members dated 9 April 2010 refers) *




      For staff under age 55


            It is not possible to access pension benefits therefore applications can be
            made without reference to pension costs. Although a decision to accept VS
            would impact on future benefits and payments.



      For staff between 55 and 60


         d. For those staff between 55 and 60 years of age it may be possible (subject to
            the rules of the pension scheme) to take early retirement. Benefits will be
            reduced by an early retirement factor. Severance pay may be used in full or
            part to reduce the amount the benefits are being reduced.
         e. Where this amount paid to the pension scheme is less than the voluntary
            severance sum then the remainder may be paid as a lump sum to the
            employee.
         f. Where employees are considering this arrangement it is recommended that
            they take independent financial advice.


      For staff between 60 and 65
            It may be possible to take early retirement with no reduction to benefits
            accrued up to 31 July 2010. An early retirement factor will be applied to
            service accrued from 1 August 2010 to proposed date of retirement.


      For staff over 65
            It may be possible to take early retirement with no reduction to benefits.


*NOTE:
These general principles are provided as a guide only and cannot be assumed or
guaranteed to apply to all staff whether in USS or PASNAS. Individuals must seek
specific information in relation to their own circumstances.




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